C&c Group Plc · LSE:CCR
C&c — FY2009/10 Earnings Presentation
36 slides from C&c's earnings presentation, May 25, 2010
Slide 1: C&C Group plc 2009/10 Full Year Results
C&C Group plc 2009/10 / Full Year Results May, y, 2010
Slide 2: Disclaimer
Disclaimer This presentation Thi t ti does d nott constitute tit t an invitation i it ti to t underwrite, d it subscribe b ib for, f or otherwise th i acquire i or dispose di off any shares h or other th securities of C&C Group plc (the "Company"). The ppresentation contains fforward‐lookingg statem
Slide 3: Presentation Agenda
Presentation Agenda g Performance Overview Disposal of Spirits & Liqueurs 2009/10 Financial Review Outlook and Q&A C&C Group plc Slide 3
Slide 4: Performance Overview
2009/10 / Performance Overview Revenue increased 16.4%* 16 4%* to €568.8 €568 8 million 2009/10 Operating Profit Organic revenue declined 8.6% Components Underlying business €83.2m Operating profit increased 20.9%* to €89.5 million Tennent's €7.0m Gaymers (€0.7m) Operating margin up 0.6pts* to 1
Slide 5: Performance Overview
2009/10 / Performance Overview 2009/10 2008/09 Change Change €m €m Constant Currency Total revenue 568.8 514.4 10.6% 16.4% Cider 336.2 386.8 (13.1%) (7.7%) Spirit & Liqueurs 78 0 78.0 85 9 85.9 (9 2%) (9.2%) (9 1%) (9.1%) Tennent’s 81.0 N/A N/A N/A Distribution 73.6 41.7 76.7% 91.2% Cide
Slide 6: Performance Overview - Republic of Ireland Cider
2009/10 Performance Overview ‐ Republic of Ireland | Cider Source: ACNielsen Data to Feb 2010 C&C Group plc Slide 6
Slide 7: Performance Overview - Great Britain Cider
2009/10 Performance Overview ‐ Great Britain | Cider Source: ACNielsen & CGA Data to 20/2/2010 C&C Group plc Slide 7
Slide 8: Performance Overview
2009/10 / Performance Overview Northern Ireland Scotland • Integration of ABI business (Tennent's) • Migration of On Trade, Off Trade & Production • Termination of Molson Coors contract business to new integrated g business unit • Distribution contract with Trade Team • Launch of Magners Pear • New
Slide 9: New Advertising Campaign
New Advertising Campaign ‐ New brand proposition established Magners Ad Bulmers Ad Clonmel Cricket Team Bulmers Berry C&C Group plc
Slide 10: Delivering to Plan
Delivering to Plan ‐ Objectives set in 2009 1 New Business Structure To allow quick, profit focused decision making Short‐ 2 Strengthen Brand To meet local consumer cons mer and customer c stomer Term Proposition needs 3 Improve Cost Position Reduce cost base and over‐capacity 4 N R New Routes TTo M
Slide 11: Positioning C&C for Long-Term Growth
Positioning C&C for Long‐Term Growth ‐ Business Transformation over 18 months • Nov 2008 Appointment of new management team • Feb/Mar 2009 New strategy articulated, asset write‐down, new business units established • F b/M 2009 Feb/Mar R Re‐organisation i i and d cost reduction d i programme implemen
Slide 12: Disposal of Spirits & Liqueurs
Disposal of Spirits & Liqueurs C&C Group plc Slide 12
Slide 13: Transaction Overview
Transaction Overview Agreement to dispose of Spirits & Liqueurs to William Grant for cash consideration of €300 million Delivers immediate and significant value for C&C Approximately 18x 2010 EBITDA Proceeds applied towards debt reduction and general corporate purposes Pro‐forma 2009/10 ne
Slide 14: Background to & Reasons for Transaction
Background g to & Reasons for Transaction Focus F on continued ti dddevelopment l t off a cider‐led id l d LAD portfolio tf li Sub Sub‐scale scale business absent significant investment No ownership of supply or distribution chain Disposal delivers capital structure to support strategic obje
Slide 15: Financial Overview
Financial Overview Spirits & Liqueurs Division 2009/10 2008/09 2007/08 €m €m €m Revenue 78 0 78.0 85 9 85.9 87 5 87.5 EBITDA (before exceptional items) 16.8 18.0 17.5 EBITDA margin i 21 % 21.5% 21 0% 21.0% 20 0% 20.0% EBIT (before exceptional items) 16.2 17.2 16.7 EBIT margin 20.7% 20.0% 19.1%
Slide 16: Impact on C&C Business
Impact on C&C Business ‐ 2010/11 Pro‐Forma Revenue Excluding Spirits & Liqueurs 2% 19% 20% 40% 44% 91% 14% 41% 20% C&C Cider Beer Gaymers Ireland N. Ireland Scotland England ROW C&C Group plc Slide 16
Slide 17: C&C Financial Profile
C&C Financial Profile Acquisition of Tennent's Tennent s and Gaymers businesses for a combined total €268.6million €268 6million Agreement to dispose of Spirits & Liqueurs for €300 million (€295 million incl. transaction fees) Net cash ash inflow inflo of c. €25 million for C&C Expected incr
Slide 18: Transaction Structure & Timetable
Transaction Structure & Timetable Disposal of entire issued share capital of Spirits companies Transaction subject to C&C Group shareholder approval Timetable 30 April, 2010 Transaction announcement Week of 24 May Shareholder circular posted 17 June, 2010 EGM 30 June, 2010 Transaction co
Slide 19: 2009/10 Financial Review
2009/10 Financial Review C&C Group plc Slide 19
Slide 20: FY 2009/10 Income Statement
FY 2009/10 Income Statement Before exceptional items 2009/10 2008/09 Change €m €m Revenue 568.8 514.4 10.6% Operating costs 479.3 414.0 15.8% Operating profit* 89.5 100.4 (10.9%) N t finance Net fi charges h (7 2) (7.2) (10 4) (10.4) (30 8%) (30.8%) Taxation (8.9) (10.2) (12.7%) Effective tax rate 1
Slide 21: Performance Drivers - Revenue
2009/10 Performance Drivers ‐ Revenue | Duty Inclusive €m 650 600 €568.8m +23.8% 550 €514.4m (2.3%) (5.9%) 500 (5.0%) €446.4m 450 400 350 300 250 200 150 100 50 0 2008/9 Volume Price Currency 2009/10 Organic Acqusitions 2009/10 Reported C&C Group plc Slide 21
Slide 22: Business Segments - Cider ROI
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits & Liq Distribution Cid | ROI Cider 2009/10 2008/09 Ch Change Constant Currency €m €m Revenue 153.0 166.6 (8.2%) ‐ Price impact (5.4%) ‐ Volume impact (2.8%) Operating profit 44.3 45.3 (2.2%) Operating margin 29
Slide 23: Business Segments - Cider GB
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits & Liq Distribution Cider | GB 2009/10 2008/09 Change Constant Currency €m €m Revenue 149.0 163.9 (9.1%) ‐ Price impact (10.3%) (10 3%) ‐ Volume impact (4.9%) ‐ Gaymers impact +6.1% Operating profit 19.7 13.3 +4
Slide 24: Business Segments - Cider ROW
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits & Liq Distribution Cider | ROW 2009/10 2008/09 Change Constant Currency €m €m Revenue R 34 2 34.2 33 7 33.7 +1 5% +1.5% ‐ Price impact (8.1%) ‐ Volume impact +9.6% Operating profit 4.4 (0.7) NM ‐ Operating marg
Slide 25: Business Segments - Tennent's
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits & Liq Distribution Tennent’s 2009/10 2009/10 2009/10 €m €m €m Tennent’s ABI/Factored Total Revenue R 81 0 81.0 31 5 31.5 112 5 112.5 Operating profit 37 3.7 33 3.3 70 7.0 ‐ Operating margin 4.6% 10.5% 6.2% NOTE
Slide 26: Business Segments - Spirits & Liqueurs
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits&Liq Distribution Spirits & Liqueurs 2009/10 2008/09 Change Constant Currency €m €m Revenue R 78 0 78.0 85 8 85.8 (9 1%) (9.1%) ‐ Price impact (5.0%) ‐ Volume impact (4.1%) Operating profit 14.7 15.8 (7.0%) ‐ Op
Slide 27: Business Segments - Distribution
2009/10 / Business Segments g Cider ROI Cider GB Cider ROW Tennent’ss Tennent Spirits & Liq Distribution Distribution 2009/10 2008/09 Change Constant Currency €m €m Revenue R 73 6 73.6 38 5 38.5 +91 2% +91.2% ‐ Organic growth +9.4% ‐ Acquisition impact +81.8% Operating profit 27 2.7 03 0.3 NM ‐
Slide 28: Cashflow
2009/10 / Cashflow 2009/10 / 2008/09 / Change g €m €m Year‐on‐Year Operating profit* 89.5 100.5 (10.9%) Depreciation 16 8 16.8 19 4 19.4 (13 4%) (13.4%) EBITDA* 106.3 119.9 (11.3%) Net capital expenditure (5.4) (18.5) (70.8%) % of depreciation 32% 95% Working capital/other** 33.7 (2.3) NM Operating
Slide 29: Balance Sheet & Pension
Balance Sheet & Pension 2009/10 €m Net debt* at 1 March, 2009 226.2 Net Debt to EBITDA 1 9x 1.9x Free cash flow in period (109.9) Dividends paid 14 7 14.7 Acquisitions 237.7 Other (3.8) Net debt* at 28 February, 2010 364.9 Net Debt to EBITDA 2.8x Pro forma 2010/11 net debt to EBITDA** post Spirits &
Slide 30: Synergies & Integration
Synergies y g & Integration g Operational integration of ABI businesses in Ireland, Ireland Northern Ireland & Scotland well advanced New defined contribution pension scheme in place and defined benefit pension reform planned in Ireland Integration of Gaymers business underway led by dedicated
Slide 31: Current Trading
Current Trading ‐ Trading for two months to 30 April Revenue, Revenue net of duty, duty on like‐for‐like like for like and constant currency basis declined 1.7% 1 7% ‐ A decline in cider revenues of 3.0%; ‐ Magners revenue decline of 1.8% in GB; and ‐ Impact p of Bulmers p price reduction in June
Slide 32: Objectives 2010/11
2010/11 / Objectives j Corporate & Financial Objectives | 2010/11 Integrate and deliver synergies from acquired businesses Continue to build on momentum of Magners in GB Protect Bulmers earnings position in Ireland Lay foundation for international development of cider Capital structure and
Slide 33: Q&A and 2010/11 Calendar
Q&A C&C Group plc | 2010/11 Calendar EGM 17 June, 2010 AGM 5 Aug, 2010 Tennent's Site Visit Sep 2010 Sep, 2010/11 H1 Results Oct, 2010 Q3 IMS Jan, 2011 C&C Group plc Slide 33
Slide 34: C&C Business Overview
C&C Business Overview C&C Tennent’s e e ts ABI d distribution st but o rights g ts Gaymer Cider Co. Other Assets • Wellpark brewery Scotland • Advances to customers • Tennent’s wholesale Non‐exclusive on‐trade • 3 year contract brewing distribution rights agreement • Pub loan book Northern Ireland P
Slide 35: Risk Factors
Risk Factors • Transaction risk • Integration risk • Cider duty risk • Exchange h rate riskk • Deteriorating business conditions in core markets C&C Group plc Slide 35
Slide 36: www.candcgroupplc.ie
www.candcgroupplc.ie C&C Group plc 3rd Floor, Block 71, The Plaza, Parkwest Business Park, Dublin 12 Tel: l +353 1 616 1100